US stocks on track for gains as coronavirus cases set to peak

US stocks were set to rise when trading begins on Wall Street with coronavirus infections in the country nearing a peak.

Futures trade pointed to a 1.3 per cent gain for the S&P 500, even as European stocks slid after eurozone finance ministers failed to reach a deal on a common response to the pandemic.

US virus cases increased 8.1 per cent on Tuesday, marking a fifth straight decline. The absolute number of new cases rose by almost 30,000 meanwhile, marking a record. But analysts expect Wednesday’s tally to be the high water mark.

“A week from now, we think confirmed case growth will be about 26,000 per day; in two weeks’ time we expect consistent sub-20,000 and falling,” said Ian Shepherdson, chief economist at Pantheon Economics.

A rise in US equities would buck a trend of more pessimistic trading in Europe and Asia. The Stoxx Europe 600 was down 0.6 per cent in early afternoon trade on the continent after a 14-hour meeting between ministers broke up without agreement on Wednesday.

“The impression it gives the world is that Europe is disjointed, and that will reinforce the view that the overall response will be slower and less impressive than elsewhere,” said Kit Juckes, an analyst at Société Générale. “And impression, as well as optics, matter.”

In London, the FTSE 100 shed 0.6 per cent, while Paris’s Cac 40 was down 1 per cent and the Dax 30 in Frankfurt was 0.5 per cent lower. 

Equities worldwide had gained ground earlier in the week as investors welcomed signs that sweeping restrictions on movement in the US and Europe were proving effective in slowing the spread of coronavirus. But optimism has wavered, with little clarity yet on how quickly those restrictions can be lifted and fears remain about the economic impact of the pandemic.

The global rally cooled in Wall Street trading on Tuesday, with the S&P closing down 0.2 per cent following a 7 per cent surge the previous day.

A jump in Asian equities came to an end on Wednesday, with most markets there following Wall Street lower. Hong Kong’s Hang Seng index closed down 1.2 per cent on Wednesday while China’s CSI 300 fell 0.5 per cent, though Japan’s Topix posted a 1.6 per cent gain.

Government bond prices fell ahead of Wall Street’s open after gains earlier in the day as investors exited the debt. The yield on US 10-year Treasuries — which moves inversely to price — was up 0.029 percentage points at 0.763 per cent.

Oil gave up earlier gains to trade broadly flat as the market weighed the prospect of a deal later this week between Saudi Arabia and Russia that would curb production and underpin the market. 

Brent crude, the international oil benchmark, was up 0.2 per cent at $31.91 a barrel.

G20 oil ministers are set to meet on Friday to try to find measures to support the global industry. Before that, Saudi Arabia and Russia are scheduled to meet on Thursday to address a feud over production that has flooded global markets with supply and halved the price of oil this year. 

“We’re obviously set up for the next couple of days with very high expectations,” said Robert Rennie, global head of market strategy at Westpac.